Category Archives: Residential Mortgages

Taking a Closer Look at the Canadian Housing Economy

Just how important is the housing market to the Canadian economy? According to a recent report by Willing Dunning, Chief Economist for the Canadian Association of Accredited Mortgage Professionals, the Canadian housing market accounts for nearly 8% of total Canadian employment. That’s nearly 1.35 million direct and indirect jobs.

The report also shows that the mortgage industry plays a particularly important role in job creation. According to the data released in the report, it’s estimated that 18% of all job creation in the last five years has occurred as a direct or indirect result of growth in the housing and mortgage sectors.

Not surprisingly, rising home values lead to increased consumer spending, which results in a stronger economy. But what happens when values reach their max? Continue reading →

Renters Could Drive Increase in Canadian Homeownership

According to a recent study conducted by TNS Canada, the nation’s housing market is expecting to see increased activity within the next two years. The online study, which was commissioned by TMG The Mortgage Group Canada, discovered that just under one third of Canadian renters are planning to buy real estate within the next two years. That amounts to a potential increase in demand of nearly 12%. Not surprisingly, many recipients credit mortgage interest rates for driving their purchase decision. Continue reading →

“Price War” Prompts TD and RBC to Up Rates

Canadian mortgage rates are on the rise again, reportedly thanks to “price-cutting” by some of the nation’s top banks. After briefly offering record-low rates of 2.99% on a 4-year fixed mortgage, both RBC and TD have raised rates by 40 basis points. The move comes rather unexpectedly; when the Royal Bank of Canada announced it was dropping their rates on January 13, the bank stated that they intended to keep the rates locked in the market until February 29. Continue reading →

CMHC Backing Fewer Loans: A Look at the Repercussions

Last week, The National Post reported on the Canadian Mortgage and Housing Corporation (CMHC) and their growing insurance load coverage. According to the story, the CMHC is edging closer to a $600-billion government-imposed limit on mortgage default insurance, backing nearly $541-billion in mortgages. If the demand grows for mortgage default insurance, the CMHC will need to request a limit extension – something that could create increased risk for taxpayers should the Canadian housing market collapse. Continue reading →

More Rules Rumoured for Hot Canadian Real Estate Market

The Government of Canada is considering imposing stricter rules on mortgages due to the nation’s seemingly overvalued housing market. Bank of Canada’s Governor, Mark Carney, and Finance Minister, Jim Flaherty, have been focused on the nation’s rising debt load for more than a year, stating that things must change in order to avoid serious economic repercussions. Ironically, instead of encountering a doomsday outcome, the Canadian real estate market has continued to boom as rates remain low and buyers maintain an optimistic outlook. Continue reading →